The Home Depot's Integrated Marketing Communications Plan
RUNNING HEAD: Home Depot IMC PlanThe Home Depot’s Integrated Marketing Communications PlanWriting Assignment 6Ashley MullingsWest Virginia University1
Home Depot IMC Plan2Executive SummaryThe Home Depot is a home improvement retailer that has operations in the United Statesand a few international markets. Founded in 1978 in Atlanta, Georgia, this company prides itselfon competitive pricing and stellar customer service. Since its creation, The Home Depot hasdominated as a retailer in the home improvement industry. During the economic crisis of 2008, itwas able to shift gears to match the needs of the consumers. This strategy helped the company toprevail during the crisis and will help the company in the long run. This Integrated MarketingCommunications plan (IMC plan) for the Home Depot aims to help transition its strategy tomatch the mindset of its future consumer base. This plan addresses the issue and offers proactivesolutions.The Home Depot currently has three primary target markets. This IMC plan reveals anew market segment for the company to tap into. The Crafty Millennial market segment iscomprised of men and women, ages 18 to 30-years old, who may rent or own a home. The CraftyMillennial is also price sensitive but has a strong desire for personalization. Research suggestthat the Crafty Millennials will make up a large portion of the market of homeowners. The mainobjective of this plan is to target the Crafty Millennial before or while they transition into HomeDepot’s current target market. This plan also aims to increase online sales revenue, increasebrand awareness and market share.A thorough review of the company’s background, current target market, and a SWOTanalysis suggested this would be a viable market segment to target. This will create brand loyaltyat an earlier stage. This plan outlines the various elements that will be utilized in order to achievesuccessful implementation. This strategic outline includes marketing, creative, direct marketing,social media and the methods to evaluate the success of the campaign.
Home Depot IMC Plan3Table of ContentsEXECUTIVE SUMMARY .2BACKGROUND INFORMATION .5PRODUCTS AND SERVICES .7ECONOMIC ANALYSIS .7MARKETING AND PROMOTIONAL ANALYSIS .10TARGET AUDIENCE .11SWOT ANALYSIS .14CAMPAIGN OBJECTIVES AND STRATEGIES .14MARKETING OBJECTIVES .14MARKETING STRATEGIES .15MEDIA ADVERTISING PLAN .15MEDIA OBJECTIVES .15MEDIA STRATEGIES .16MEDIA TACTICS .16FLOW CHART .18DIRECT MARKETING PLAN .19DIRECT MARKETING OBJECTIVES .19DIRECT MARKETING STRATEGIES .19DIRECT MARKETING TACTICS .19PUBLIC RELATIONS PLAN .20PUBLIC RELATIONS OBJECTIVES .20PUBLIC RELATIONS STRATEGIES .21PUBLIC RELATIONS TACTICS .21
Home Depot IMC Plan4SOCIAL MEDIA PLAN .21SOCIAL MEDIA OBJECTIVE .21SOCIAL MEDIA STRATEGIES .21SOCIAL MEDIA TACTICS .22INTEGRATED CREATIVE STRATEGY STATEMENT & CREATIVE BRIEF .23INTEGRATED CREATIVE STRATEGY STATEMENT .23CREATIVE BRIEF .24MEASUREMENT AND EVALUATION PLAN .25PRE-TESTING .25CAMPAIGN IN-PROGRESS .25POST-TESTING .26CONCLUSION .26APPENDICES .27REFERENCES .31
Home Depot IMC Plan5The Home Depot’s Integrated Marketing Communications PlanBackground InformationIn 1978, four men had the vision of creating a store that would cater to the needs of thedo-it-yourselfer (DIYers). On June 22, 1979 the first two Home Depot stores were opened inAtlanta, Georgia (Home Depot, n.d.). In the early stages of development, the foundersrecognized a problem in the industry and knew what steps needed to be taken in order todominate the market. Customers’ needs would be the forefront of their strategy (The HomeDepot, Inc. - Company Profile, Information, Business Description, History, BackgroundInformation on The Home Depot, Inc., n.d.). The founders were able to recognize a key factorabout their target market that their predecessors failed to realize. Do-it-yourselfers accounted for60 percent of sales volume, but those same DIYers did not have the technical skill or knowledgeto successfully complete certain projects (The Home Depot, Inc. - Company Profile, Information,Business Description, History, Background Information on The Home Depot, Inc., n.d.). TheHome Depot would soon be the solution to the problem in this industry.In order to ensure that the customer’s needs would be fulfilled, the founders knewsuperior service started with well-trained associates. “From the start, associates were able tooffer the best customer service in the industry, guiding customers through projects such as layingtile, changing a fill valve or handling a power tool. Not only did store associates undergorigorous product knowledge training, but they also began offering clinics so customers couldlearn how to do it themselves. The Home Depot revolutionized the home improvement industryby bringing the know-how and the tools to the consumer and by saving them money” (HomeDepot, n.d.). Home Depot went beyond having well-trained staff by offering in-storeinstructional workshops. Local contractors would be brought in as teachers in some cases (The
Home Depot IMC Plan6Home Depot, Inc. - Company Profile, Information, Business Description, History, BackgroundInformation on The Home Depot, Inc., n.d.). The Home Depot realized that in order to be knownfor exceptional service, they would have to provide more than their competitors would. Excellentcustomer service went beyond having a friendly and knowledgeable sales associate, but toproviding knowledge and skills to the customer as well.The Home Depot’s mission statement embodies the principles that the company wasfounded upon. “The Home Depot is in the home improvement business and our goal is toprovide the highest level of service, the broadest selection of products and the most competitiveprices” (Home Depot, n.d.). The Home Depot also has eight core values to ensure that associatesare working towards the company’s mission on a daily basis:1. Taking care of people2. Giving back to our communities3. Doing the right thing4. Excellent customer service5. Creating shareholder value6. Building strong relationships7. Entrepreneurial spirit8. Respect for all people (Home Depot, n.d.).Ensuring that the core values and the mission statement is at the center of all activities, creates acompany culture that is working towards a common goal. All associates know the direction thecompany is striving towards and the standard has been set. The Home Depot is able to establish asense of continuity by ensuring the mission statement is at the forefront of all operations,including promotions.
Home Depot IMC Plan7Products and ServicesThe Home Depot is a big-box retailer of tools, hardware, and appliances; catering to anyhome improvement needs. Home Depot currently has thousands of locations throughout theUnited States, United States territories, Canada, China, and Mexico (Home Depot, n.d.). Its hasnot only exceeded national boundaries, but also traditional brick-and mortar stores. The storescarry a wide selection of items, but it is impossible to carry every item in store. Each store isstocked with merchandise that is matched with the specific market needs of that area (HomeDepot, n.d.). The website allows Home Depot to offer the full range of products possible,including products that can be special ordered (Business Analysis of Home Depot, 2015).While maintaining such a high volume of inventory, Home Depot also seeks to keep costlow for the consumer. “The Home Depot is working to offer its products at the lowest pricepossible without the need for rebates or reward programs. This will allow its customers to getlow prices immediately instead of having to wait for a rebate. This caters to its new focus on‘More saving. More doing’ (Business Analysis of Home Depot, 2015). Beyond promotions andrebates, Home Depot will even offer a low price guarantee (Home Depot, n.d.). This strategyensures that it is in line with or surpassing its competition in pricing.Economic AnalysisHome Depot became a publicly traded company on the NASDAQ in 1981. By 1984, itwas traded on the New York Stock Exchange (Home Depot, n.d.). By 1993, Home Depotcontinued expansion. Other stores began to saturate the home remodeling superstore market aswell (The Home Depot, Inc. - Company Profile, Information, Business Description, History,Background Information on The Home Depot, Inc., n.d.). Home Depot’s main competitors areLowes, Ace Hardware, and any local or regional hardware store. Other competitors include
Home Depot IMC Plan8stores such as Bed Bath and Beyond and Ikea, that serve to provide items for homeimprovement.Home Depot had to reposition itself in order to maintain a strong hold on the market. Inthe beginning stages of The Home Depot, the company positioned itself using a differentiationstrategy. Priding itself on stellar customer service and offering a wide selection of products. Asmore competitors entered the marketplace, there was a need to change the business model inorder to maintain a lead. The Home Depot then switched to a cost-leadership strategy, whichallowed The Home Depot to lower cost while improving performance. This strategy also allowedThe Home Depot to charge a lower price to attract more customers (DeFoe, 2013). Thesebusiness model strategies have allowed The Home Depot to maintain a leg-up over it’scompetitors.As of 2015, The Home Depot has dominated the home improvement industry, accountingfor 60% of all revenues (Newstex, 2015).“The U.S. is an important market for Home Depot since approximately 97%of its stores span across the country. While the U.S. economy is expected tocontinue doing well, with GDP projected to grow at about 3% andunemployment remaining below 6%, higher activity in the housing marketcould stir home improvement spending. The National Association of Realtors(NAR) projects existing home sales to grow at a rate of 6.4% and 4.1%, in2015 and 2016, respectively. In spite of this, existing home sales in absolutenumbers have not yet reached their pre-recession levels, which is indicative ofpotential in the years going forward. New home sales are also expected toregister a whopping 33% and 27% increase over the next two years, which
Home Depot IMC Plan9could further fuel demand for home improvement goods. Additionally, pricesof both existing and new homes are projected to increase, with the formergrowing at a rate of 5.6% and the latter growing at 2.7% in 2015” (Newstex,2015).Analysis of the industry and the economy is crucial to the growth, or demise, of TheHome Depot. The home improvement industry is very dependent on the state of the economy. Ifconsumers sense financial instability, they are less likely to be compelled to spend money toimprove their homes. On the other hand, if consumers see the economy in a state of growth,especially the real estate market, they will be more inclined to pursue home improvementprojects. Home improvements can lead to an increase home value. When the market is in apositive standing, increased home values are very beneficial. Home Depot has to align itself withthe volatility of the market. An industry and economic analysis should be the forefront of allmarket research performed by The Home Depot. The Home Depot needs to be able to adapt tohow its consumers react to the economy.During the Recession of 2008. The Home Depot shifted focus and used the downeconomy as a window of opportunity. Instead of focusing on opening new stores the focusshifted to improving operational functions and improving the customer experience. “Thecompany plans to have 100 percent of its stores hooked into the rapid deployment system byyears’ end, which should boost sales, due to fewer out of stocks and create a more cost efficientproduct flow to stores, reducing costs. Additionally, the company has built up initiatives toimprove the analytics it uses to evaluate merchandise and display. By more effectively analyzingthe kind and amount of product that goes into stores, the company has been able to cut down oninventory close outs and related discounts” (Duff, 2010). The Home Depot decided to make
Home Depot IMC Plan10improvements that would last beyond the economic downturn, instead of trying to adapt to atemporary situation.Marketing and Promotional AnalysisThe Home Depot utilizes a variety of mediums in its marketing communications strategy.In 2014, The Home Depot spent 793.7 million dollars in promotion and advertising (Statista,2015). “Home Depot’s promotion activities include the following tactics: Advertising (TV commercials) Personal selling (store personnel) Sales promotions Public relations Direct selling (contractors)” (Rowland, 2015).The Home Depot has a very diverse product offering and implemented various means ofcommunication to interact with customers. Sales associates are the biggest tactic utilized. Salesassociates are knowledgeable on products and current promotions. So knowledgeable that theyeven create content for the company’s blog (Rowland, 2015). Beyond the sales associate, theinternet would be the next largest tactic utilized. Currently The Home Depot utilizes: Main Website: www.homedepot.com Blog: http://blog.homedepot.com Twitter: www.twitter.com/HomeDepot Instagram: www.intsgram.com/HomeDepot Pinterest: https://www.pinterest.com/homedepot/ YouTube: https://www.youtube.com/user/homedepot Facebook: https://www.facebook.com/homedepot
Home Depot IMC Plan 11Charitable Organization: http://www.homedepotfoundation.orgIt is safe to say, The Home Depot has not shied away from digital avenues. Each websiteproviding content that is relevant to the consumer.A quick Google search of The Home Depot will generate quite a few results, 97 billion tobe exact. Beyond the content and websites created by The Home Depot, there is a lot of earnedmedia. Whether it is news reports or a stock analysis or content generated by consumers, there issome mention of the company. “Home Depot has established a lifestyle brand around all aspectsof home building, maintenance, décor and gardening. They understand their target audience andtherefore are more effective in marketing to them. With over one million fans on Facebook, theircontent on the social network includes consumer polls, helpful tips, product/service promotions,“Tell us Tuesdays,” and “Mystery Product” guessing games” (ZOC Digital, 2013). This speaksto the public relations of the company.With such a large advertising and promotion budget and the use of various media toengage and interact with consumers, it is clear that The Home Depot was focused onimplementing a marketing communications strategy that would fully reach its target market. Thisapproach would allow The Home Depot to remain a leader in the home improvement retailindustry.Target AudienceHome Depot has divided its target audience into three specific segments. “The HomeDepot’s target market segmentation consists of do-it-yourself (DIY) customers, do-it-for-me(DIFM) customers, and professional customers. Within these target markets, they specificallymarket to female DIY and DIFM customers” (Business Analysis of Home Depot, 2015). “TheHome Depot Executives realized they were missing out on a large market because they were not
Home Depot IMC Plan12effectively marketing to female shoppers. In response to this, they started offering “Do-ItHerself” workshops, which showed women how to use different tools and complete decoratingor home improvement projects on their own. Their efforts were widely successful (BusinessAnalysis of Home Depot, 2015). Overall, the general demographic of each segmentation issimilar. Middle-aged, middle class home owners. By offering low prices, workshops, andinstructional videos, Home Depot is targeting consumers who are not afraid to dive into a projectthemselves. It is also catering to licensed professionals and contractors who are eager to learn anew skill or technique for their trade. Home Depot’s target market, no matter the segment, isprice sensitive while wanting to obtain as much information as possible.Currently, Home Depot is missing out on a target demographic that has a large amount ofpotential, millennials. “The National Association of Realtors 2015 report on generational trendsfound that millennials, who are currently between ages 25 and 34, make up the largest share ofhomebuyers at 32 percent. Even more striking, millennials now constitute 68 percent of firsttime homebuyers” (Palmer, 2015). This demographic is also more likely to purchase a home thatmay need more work and customize it to meet their needs.Millennials are very price sensitive. “Nearly a third of Millennials prefer full-on “fixeruppers” to homes in need of only slight repairs. Why? Well, these homes come with moreappealing price tags, but that’s only part of the “big picture.” Millennials also want their uniquefingerprints on their living spaces and homes which reflect their personal style and designaesthetic. Buying a fixer-upper lets them get in on the ground floor, in a manner of speaking”(Wingman Advertising, 2015). Home Depot already has the advantage of being competitivelyand relatively low priced. Home Depot’s current non-professional target audience is gearedtowards home owners. Home Depot can use the same services and offerings it currently has to
Home Depot IMC Plan13start attracting the Millennial demographic. By establishing a connection with them now, HomeDepot will be able to create a brand loyalty with Millennials for when they become homeowners.Instead of attempting to establish the connection after homeownership, it would occur prior.This new target market segment will be called the “Crafty Millennial.” These 18 to 30year-olds are currently living on their own, in predominately rented or shared spaces. Thesespaces are smaller due to the price and/or location. There are many DIY projects suited towardssmaller or shared living spaces. Essentially, ways to make it more personalized even though it isnot a permanent residence. The Crafty Millennial is price sensitive so they aim to get the mostout of their dollar. They are willing to tackle projects that are low cost but will add an air ofpersonalization to their living space. The Crafty Millennial is next in line for home ownership.The Crafty Millennial is willing to save up for that special project and put in a lot of planningand researching. If Home Depot started using its current resources to reach out to the CraftyMillennial market, Home Depot would take another leap in front of its competition. Home Depothas already experience substantial growth, the goal is to ensure that the company stays relevantand maintains that growth in the future.
Home Depot IMC Plan14SWOT AnalysisStrengthsWeaknesses Upward sales through the recent recession Diverse and exclusive product offering Knowledgable associates providing excellentcustomer service to unknowledgable millennials Implementation of an interconnected retailprogam offering more buying options Developed an online presence in 2014, which islate compared to others Success is dependent on the U.S. economy Data Breach gives consumer a sense of financialinsecurity, especially to millennials who areweary of financial situations.Home Depot SWOTAnalysisOpportunitiesThreats Housing market recovery International markets Consumers increasing use of onlinemarketplaces and mobile apps which appeals tothe digitally driven millennials Millennials are crafty and will be more prone todoing DIY projects Millennials are crafty and will shop at odd andend stores before going to specific home goodsrelated stores, creating a larger group ofcompetitors Millennials shopping habits will be dependenton the current economic conditions.Campaign Objectives and StrategiesMarketing ObjectivesIncrease online revenue by a minimum of 15% in one year by engaging the Crafty Millennialthrough interactive media avenues.
Home Depot IMC Plan15Increase Home Depot brand awareness by 15% for the Crafty Millennial market segment overthe next 12 months. Creating brand awareness at this stage will assist them entering the nextstage of the market segments.Transitional consumers should account for 25% of revenue in the next four years.25% of the Crafty Millennial market will have a preference for the Home Depot brand comparedto competitors within the six months of campaign launch.Marketing StrategiesCustomer service associates increase exposure and push use of apps and interconnected retailprogram.Remain competitively priced to stores such as Ikea, Walmart, Urban Outfitters, using pricematch guarantees.Introduce new do-it-yourself workshops: renter’s edition.Ensure content shows Millennials tips and tricks that they can can carry with them when theybecome homeowners.Create a student discount/incentive program offering special deals and promotions.Media Advertising PlanMedia ObjectivesTo reach 60% of the Crafty Millennial market segment a minimum of four times every month forone year to attract new customers while increasing brand awareness.Use of paid media to maintain average reach of 75% for the next year to maintain brandawareness with existing target markets (Do-It-Yourself, Do-It-For-Me, and Professionals).Reach 45% of Crafty Millennials during the back-to-school season a minimum of three timesusing geographically targeted school/university sponsorships.
Home Depot IMC Plan16Media StrategiesUse paid media to effectively target the Crafty Millennial market, which consists of 18 to 30 yearolds living in metropolitan areas with an annual income of 25K or more.Will use a combination of mass media and direct media vehicles in a national campaign.Campaign will be national, but focus on college towns and metropolitan areas to attract theCrafty Millennial.Paid media will follow a continuity scheduling, appearing consistently throughout the year tomaintain awareness.School/University sponsorships will geographically target the Crafty Millennial segment. Whenmoving from home, whether living on or off campus, the Crafty Millennial will seek ways tomake their new living quarters more like home. It will also build more brand awareness for whenthe Crafty Millennial is moving into the next stage of life after graduation.Crafty Millennials are cost sensitive because of a limited budget. Most will not have an extensivetelevision package. Broadcast advertisements will be strategically placed to ensure morepotential of views.Internet ads and pay per click advertising will be used concurrently. These mediums will be usedonce the potential consumer initiates a search. This tactic will be to strengthen awareness morethan increase reach.Media Tactics Televisiono Channels such as VH1, MTV, primetime networks, E!o Subscription streaming services, such as Hulu, Vevo Internet Ads
Home Depot IMC Plano Pandora, Spotify, iTunes Radio, Social Media adso YouTube, Pinterest, Facebook, Instagram, Twitter, Tumblr, blogs, etc. School/University sponsorshipso Sponsoring schools and school eventso Sponsoring college sports team Email Pay per click17
Home Depot IMC Plan18Flow ChartAs stated in the Media Strategies, paid media will follow a continuity scheduling. Somemedia will be used throughout the year, while others will be used at strategic points of thecampaign. For example, there will be a heavy push of television advertisements from April toSeptember. This push will create more brand awareness during the back to school and movingseason for for the Crafty Millennials. Members of this target market will be moving into dorms,rented spaces or their own homes during this time. Overall, there will be media usage during all12 months of the IMC plan.
Home Depot IMC Plan19Direct Marketing PlanDirect Marketing ObjectivesObtain a 10% response rate to DIY workshop/presentation invitations for each event across alldirect marketing media.Obtain a 20% coupon redemption rate driven emails and direct selling during the 12-monthcampaign.Increase email click-through rate by 15% during the 12-month campaignIncrease online catalog views by 20% during the 12-month campaignIncrease online sales by 30% driven specifically by direct marketing media.Direct Marketing StrategiesUse direct marketing media in a one-step approach to generate response through signing up forworkshops/presentations, sharing tutorials/presentations with social network or buying products.Direct Media will be a part of a national campaign, primary focus will be college andmetropolitan areas to attract the Crafty Millennial.Direct Media campaign will follow a pulsing schedule. Schedule will be maintained year roundwith a heavier push from May-December to capture graduating Crafty Millennials that aremoving away.Direct Marketing Tactics Emailo Market segment will opt-in to receiving emails when signed up for workshops orwhen visiting the website.o Notify of upcoming workshopso Notify of special promotions to increase revenue
Home Depot IMC Plan20o Special incentives to drive more traffic into storeso Highlight parts of the catalogo Showcase new projects and productso Be utilized throughout the 12-month plan Online catalogo Showcase different projects or design options for dorms and rented spaces.o Offer coupons in the online catalog. Direct Selling (In-person/online)o DIY Workshops/Presentations/Demonstrations§In-store demonstrations on quick and easy projects. Sign-up occurs beforethe event through social media, email, in-store, etc.§Workshops and presentations can occur on school campuses – decoratingtips for dorms and rented space.§Hand out coupons and catalogs at workshops and presentations.Public Relations PlanPublic Relations ObjectivesIncrease The Home Depot’s earned media by 5% on each of the primary social media sites(F
The Home Depot's Integrated Marketing Communications Plan Background Information In 1978, four men had the vision of creating a store that would cater to the needs of the do-it-yourselfer (DIYers). On June 22, 1979 the first two Home Depot stores were opened in Atlanta, Georgia (Home Depot, n.d.). In the early stages of development, the founders
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